CZ Attempted to Pledge Binance.US Stake for Temporary Travel Approval; SEC Delays Decision on BlackRock’s Spot Ethereum ETF to March; Bitwise Releases Wallet Addresses of Spot Bitcoin ETF Holdings
SEC Delays Decision on BlackRock’s Spot Ethereum ETF
The United States Securities and Exchange Commission (SEC) has delayed its decision on BlackRock’s proposed spot Ethereum (ETH) exchange-traded fund (ETF) a day ahead of the initial deadline. The SEC cited the need for more time to review the proposed rule change, and the new deadline is now in March.
Assistant Secretary Sherry Haywood explained in a filing on Jan. 24 that the SEC finds it appropriate to designate a longer period for the review. The initial deadline was Jan. 25, and it marks the first of several delays the SEC can utilize within a 240-day period.
The SEC must make a final decision on BlackRock’s spot Ethereum ETF by Aug. 7. Bloomberg ETF analyst Eric Balchunas predicts that a final decision on all pending spot Ethereum ETFs will be made in May, similar to the way the SEC decided on 10 pending spot Bitcoin ETFs on Jan. 10.
Other spot Ethereum ETF applicants, including VanEck, Ark 21Shares, Grayscale Investments, Invesco Galaxy, and Fidelity Investments, have various final decision deadlines ranging from May to August. Balchunas estimates a 70% chance of spot Ethereum ETF approval by May.
SEC Commissioner Hester Peirce, also known as “Crypto Mom,” reassured applicants that a court battle won’t be necessary to convince the SEC to approve spot Ethereum ETFs.
Former Binance CEO CZ Attempted to Pledge Binance.US Stake for Temporary Travel Approval
Former Binance CEO Changpeng Zhao (CZ) attempted to use his multibillion-dollar stake in Binance.US as collateral to secure permission for temporary travel to the United Arab Emirates, according to a recently unsealed court filing.
In the Jan. 24 filing, a letter from Zhao’s lawyers dated Dec. 22, previously sealed, was revealed. In the letter, Zhao offered his equity in Binance.US as security, estimated to be worth $4.5 billion based on a funding round two years ago. The purpose of the travel was to visit a friend or family member undergoing surgery and staying in the hospital. However, the request was not granted by federal prosecutors, as indicated in the letter.
Judge Richard Jones, who presides over Zhao’s case, denied the travel request in a closed-door hearing on Dec. 29. Zhao pleaded guilty to money laundering on Nov. 21 and is currently out on a $175 million bond, facing up to 18 months in prison. As part of the plea deal, he agreed not to appeal any sentence up to that length.
Judge Jones had previously blocked Zhao from traveling to the UAE as part of his bond conditions, citing his “enormous wealth and property abroad,” indicating a risk of flight. Zhao is required to stay in the United States until his sentencing date on Feb. 23. His current location within the country is unknown, and he has been largely inactive on social media.
Changpeng Zhao stepped down as Binance CEO in November 2022 as part of a $4.3 billion settlement with U.S. regulators. The settlement involved admitting to running an unlicensed money-transmitting business and violating the Bank Secrecy Act.
Bitwise Releases Wallet Addresses of Spot Bitcoin ETF Holdings
Asset management firm Bitwise has made the Bitcoin addresses of its spot Bitcoin exchange-traded fund (ETF) public, allowing anyone to verify the fund’s holdings. The move comes approximately two weeks after the spot Bitcoin ETF shares became available for trading.
In a post on X on Jan. 24, Bitwise announced that the Bitcoin addresses for its Bitwise Bitcoin ETF (trading as BITB on the NYSE Arca) are now accessible for verification. The provided address contains 11,858.63 BTC, equivalent to around $465 million at the time of publication.
The U.S. Securities and Exchange Commission (SEC) approved Bitwise’s spot Bitcoin ETF offering on Jan. 10, along with 10 other applications from various asset management firms. It remains to be seen whether other companies plan to follow suit and release BTC addresses for their investment vehicles. An X poll conducted by Bitwise CEO Hunter Horsley showed that the majority of respondents (91.1%) favored making BTC holdings public.
Bitwise co-founder and CEO Hunter Horsley stated that the decision to release the BTC address was in response to clear feedback from investors. ETF analyst James Seyffart noted that Bitwise is the first but likely not the last to post Bitcoin addresses for their ETFs. About seven days after its launch, BITB ranked in the top 5% of ETFs by assets under management in 2023. On the seventh day of trading, there were approximately $76 million in net outflows for all spot Bitcoin ETFs, with Grayscale’s GBTC leading in the largest net outflows.